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Low Risk, High Reward Trading Experiment

  • #1,441
  • Oct 16, 2006 9:30pm Oct 16, 2006 9:30pm
A Sell on AUD/CAD at 8600 looks like a good trade in the making, and it does have a recent Support at 8288 just above a S2 Support level. I will be watching the GBP/USD to go down to 8600 also, but I don't have intentions of entering a Sell on GBP/USD at this point.

Monarch
  • #1,442
  • Oct 16, 2006 9:36pm Oct 16, 2006 9:36pm
LOL, yup I was paying attention. the numbers fit quite well on cable too. Maybe not the wave.



Quoting itme
Actually, I meant AUD/CAD -check out the pattern. I think it's ideal from the perspective of our trend reversal system. But out of habit I stuck in the 1's!

The CAD has been depreciating while the AUD has been appreciating meaning- opportunity on the cross pairs.

Thanks for the heads up.
  • #1,443
  • Oct 17, 2006 1:49am Oct 17, 2006 1:49am
Strange coincidence. I believe you're right. It might be that the numbers would work on both currencies - GBP/USD and AUD/CAD, with just a removal or addition of the initial "1". How often do you think that happens? One in a thousand times at most. I'll make sure to note whether both "trade signals" are winners. There is a good chance they will both succeed.
  • #1,444
  • Edited 2:14am Oct 17, 2006 1:58am | Edited 2:14am
Tuesday October 17 at 3:00 ET

Due to the evidence in the detailed wave count, it is possible that .8584 is the ultimate high of this trend. Therefore we revise entry price to .8582 instead of .8600

Revise entry Trade Signal #211 Sell AUD/CAD to .8582

________________________________________

Previous trade signal:

Monday October 16 at 22:15 ET

Trading daily Wave 1 down:

Trade Signal #211 Sell AUD/CAD at .8600
Stop is .8626
Target is .8300
Risk is 53 pips
Reward is 273 pips
Reward : Risk ratio is 5.2 to 1

For research purposes only.
  • #1,445
  • Oct 17, 2006 1:59am Oct 17, 2006 1:59am
Quoting monarch
A Sell on AUD/CAD at 8600 looks like a good trade in the making, and it does have a recent Support at 8288 just above a S2 Support level. I will be watching the GBP/USD to go down to 8600 also, but I don't have intentions of entering a Sell on GBP/USD at this point.

Monarch
So, u think GBP/USD has made a confirmation for the upmove?
  • #1,446
  • Oct 17, 2006 3:14am Oct 17, 2006 3:14am
My personal guess for when GBP/USD will turn around and head south is 1.8650 to 1.8670, and most likely the latter. I don't know how to predict it accurately, but if I try hard I think I may be able to recognise it employing my trading system, which includes Elliott Wave theory and fibonacci projections.

Monarch - what is your view on the matter?

Anyone else care to offer an educated opinion?
  • #1,447
  • Oct 17, 2006 3:47am Oct 17, 2006 3:47am
Tuesday October 17 at 3:00 ET

Re-enter Trade Signal #208B Sell AUD/USD at .7557

Stop is .7584

Target#1 is .7350

 Risk is 31 pips

Reward is 203 pips

Reward : Risk ratio is 6.5 to 1

For research purposes only.

_______________________________________________

Previous trade signal and comments: <hr style="color: rgb(209, 209, 225);" size="1"> <!-- / icon and title --> <!-- message --> Monday October 16 at 16:30 ET

The price of AUD/USD rose to a high of .7546 today, hitting our stop exactly. On reflection, this stop was placed much too low, only 16 pips above the entry price, and not in a truly safe place. In fact, according to our trading system, we should not be entering this short trade unless the price reaches .7560. So the trade signal #208A is system non-compliant.

We are rising in a corrective Wave 4 of a large downtrend. The current Wave C of the Wave 4 up is not complete until it has completed 1-2-3-4-5. It is currently either in the third or fifth wave up of Wave C . Earlier when we shorted the AUD/USD we mistook the pattern for a completed Wave 4 "abc" up. Subsequent price patterns invalidated this interpretation. We also ignored our targetting reversal criteria, which is the reason we lost this trade.

In addition to the above technical problems with our short AUD/USD trade, fundamentals support a strong upwards movement, as fspirani brought to our attention above. (thanks, fspirani!). It is better to enter trades when both technicals and fundamentals are in agreement. It is not necessary, but it is preferable. If the technical conditions are truly fulfilled, then a trade taken contrary to prevailing sentiments is often successful.
__________________________________________________ ____

Update Trade Signal #208A Sell AUD/USD at .7506 <hr style="color: rgb(209, 209, 225);" size="1"> <!-- / icon and title --> <!-- message --> Monday October 16 at 7:00 ET

Since Re-entering Trade Signal #208A Sell AUD/USD at .7506 the price fell to .7488 and then rose this morning to .7530, the current price. This would be a low risk / high reward opportunity to short AUD/USD, if the original trade signal was not acted upon. The stop should be at .7546
__________________________________________________ ___
Re-enter Trade Signal #208A Sell AUD/USD at .7506 <hr style="color: rgb(209, 209, 225);" size="1"> Thursday October 12 at 10:30 ET

The small upwards Wave c of the corrective Wave 4 trend in AUD/USD (which according to EW Theory was inevitable) received a medium sized boost from the favorable employment data yesterday, exacerbating the upwards wave, causing our stop to be hit. It carried AUD/USD higher than the first likely reversal value, and then past two more values to the fourth which is a very high probability reversal value of .7509. As Newstrader says below, the dollar currencies move in their own sphere independent for the most part from the European and Asian currencies. It is common for one of the dollar currencies to rise while GBP and EUR are falling relative to the USD. This accounts for the large swings in EUR/CAD, EUR/AUD, AUD/JPY, etc.

As reason and previous experience indicates, the likelihood of success of this re-entry trade is higher than the previous, initial trade, and it is a better trade in terms of reward: risk ratio also. The entry price is higher, the upwards trend is larger, increasing the probability of reversal; and also the potential earnings are larger, improving the reward : risk ratio, even though the stop size is larger.

Re-enter Trade Signal #208A Sell AUD/USD at .7506
Stop is .7541
Target#1 is .7350
 Risk is 40 pips
Reward is 151 pips
Reward : Risk ratio is 3.8 to 1

For research purposes only.
  • #1,448
  • Oct 17, 2006 4:05am Oct 17, 2006 4:05am
Tuesday October 17 at 5:00 ET

Trade Signal #212 Buy USD/JPY at 118.65

 Stop is 118.45

 Target is 120.00

 Risk is 23 pips

Reward is 130 pips

Reward : Risk ratio is 5.6 to 1

For research purposes only.
  • #1,449
  • Oct 17, 2006 4:37am Oct 17, 2006 4:37am
Quoting itme
My personal guess for when GBP/USD will turn around and head south is 1.8650 to 1.8670, and most likely the latter. I don't know how to predict it accurately, but if I try hard I think I may be able to recognise it employing my trading system, which includes Elliott Wave theory and fibonacci projections.

Monarch - what is your view on the matter?

Anyone else care to offer an educated opinion?

Hi itme,

last night I just said to a friend "you can try to sell 1.8670 / 720" so it's funny to read it here now. As I can see the first hit and rejection of 670 was already worth a few pips with virtually no stop required and good for a scalp. The price however is moving back towards it and considering we've still got the NY session to go I will assume that there is still plenty of room to either side. 1.8720-30 still looks like resistance and also has a FE target.
Past that I think 1.8860 is not impossible as a next area of resistance. I also outlined my weekly outlook on another thread.
Trying to pre-empt a turnaround is near impossible I find, but you can at least watch likely reversal spots for price action (btw I recommend you also read the AUDUSD Analysis which might help explain why the first short attempt failed)

Best regards,

SeekingLight
Trust price. Know yourself.
  • #1,450
  • Edited 5:15am Oct 17, 2006 4:51am | Edited 5:15am
Tuesday October 17 at 6:00 ET

Trade Signal #205A Sell GBP/USD at 1.8675

 Stop is 1.8705

 Target #1 is 1.8450

 Risk is 35 pips

Reward is 220 pips

Reward : Risk ratio is 6.3 to 1

For research purposes only.

_____________________________________

Previous trade signal:

Thursday October 12 at 22:15 ET

Adjust stop on Trade Signal #205 Sell GBP/USD at 1.8580 to 1.8665
_____________________________________________

Wednesday October 11 at 6:00 ET

Trade Signal #205 Sell GBP/USD at 1.8580
Stop is 1.8623
Target #1 is 1.8450
Risk is 47 pips
Reward is 126 pips
Reward : Risk ratio is 2.7 to 1

For research purposes only.

This week's data barrage begins in earnest today with several key economic reports slated for release from the UK, Eurozone, US and Canada. Given market focus over global interest differentials, inflation data will provide further insight on central banks' decisions.
  • #1,451
  • Oct 17, 2006 5:01am Oct 17, 2006 5:01am
wow... i just entered long @ 1.8670, l @ 1.8705 and sl @ 1.8635... that is how forex is... diversity of position, as stars in the entire universe!
  • #1,452
  • Oct 17, 2006 5:24am Oct 17, 2006 5:24am
Tuesday October 17 at 6:30 ET

Trade Signal #213 Buy USD/CHF at 1.2678

Stop is 1.2659

Target is 1.2845

 Risk is 23 pips

Reward is 162 pips

Reward : Risk ratio is 7.0 to 1

For research purposes only.
  • #1,453
  • Edited 6:36am Oct 17, 2006 5:46am | Edited 6:36am
Tuesday October 17 at 6:45 ET

 We now believe that we are at the bottom of the "c" corrective wave, preparing for the final fifth wave up.

TS# 197A Buy EUR/JPY at 148.65

 Stop is 148.43

Target #1 is 150.50

 Risk is 25 pips

Reward is 182 pips

 Reward : Risk ratio is 7.3 to 1

For research purposes only.

_________________________________________________

Previous comments and trade signal:

Update on TS# 197 Buy EUR/JPY at 149.27 for Monday October 16 at 5:00 ET

EUR/JPY fell in an "a" of a downwards corrective Wave 2 on October 5th to 149.00, which is about where we entered our long trade, then rose in a "b" to to 150.28, where we should have exited. It then fell in a "c" wave of the Wave 2 to 149.14, which would have constituted another low risk / high reward long trade opportunity with a target of 150.50 to 150.60 .
__________________________________________________ _________

Update on TS# 197 Buy EUR/JPY at 149.27 <hr style="color: rgb(209, 209, 225);" size="1"> Friday, October 13 at 15:45 ET

Since our TS# 197 Buy EUR/JPY at 149.27 was triggered the price rose to 150.28, 22 pips short of our target. It has since declined gradually in a very narrow channel for over 4 days to a recent low of 149.61

The trade was entered into half way into the fifth upwards wave, making it a midtrend entry. The conservative target for this trade is actually 150.16, which was already met. Ideally, the entry point should have been at the beginning of the fifth wave at 147.68, and the predicted safe, conservative target would have been 150.10, 242 pips higher. In any case, the likelihood of the price rising to the current target at 150.50 is still good.
__________________________________________________ __

EUR/JPY update for Friday October 5 14:00 ET <hr style="color: rgb(209, 209, 225);" size="1"> <!-- / icon and title --> <!-- message --> EUR/JPY narrowly missed hitting our stop and climbed to 149.91. All is in order to meet our target at 150.50. With all due respect, the pattern of movement between the entry point and target is irrelevant. It is possible for many different patterns to form, but the endpoint is all that is relevant.
__________________________________________________ _____

Thursday October 5 at 2:00 ET
TS# 197 Buy EUR/JPY at 149.27
Stop is 148.93
Target #1 is 150.50
Risk is 37 pips
Reward is 120 pips
Reward : Risk ratio is 3.2 to 1

For research purposes only.
__________________________________________________ _

EUR/JPY update for Wednesday October 4 at 3:00 ET

Wednesday October 4 at 3:00 ET
EUR/JPY, according to our system, can reverse its upwards trend at either 150.50, or, more likely, 151.00 to 151.10. The safest strategy is to set the limit to short EUR/JPY at 151.00 with a stop at 151.57.

The target is far off, below 148.00, so a 60 pip risk is not a problem. If the upwards trend reverses at 150.50 instead of 151.00, then we can still enter the trade during the first upwards corrective wave, at the top of the minor Wave 2.
<!-- / message --><!-- controls -->
  • #1,454
  • Oct 17, 2006 6:06am Oct 17, 2006 6:06am
What you think of Gbp/Usd trade itme? Is it in uptrend now? Or you think it should reverse from present price?
fxtrada.com
  • #1,455
  • Oct 17, 2006 6:25am Oct 17, 2006 6:25am
Quoting itme
Tuesday October 17 at 6:45 ET

We now believe that we are at the bottom of the "c" corrective wave, preparing for the final fifth wave up.

TS# 197A Buy EUR/JPY at 148.65

Stop is 148.43

Target #1 is 150.50

Risk is 26 pips

Reward is 120 pips

Reward : Risk ratio is 4.6 to 1

For research purposes only.

_________________________________________________

Previous comments and trade signal:

Update on TS# 197 Buy EUR/JPY at 149.27 for Monday October 16 at 5:00 ET

EUR/JPY fell in an "a" of a downwards corrective Wave 2 on October 5th to 149.00, which is about where we entered our long trade, then rose in a "b" to to 150.28, where we should have exited. It then fell in a "c" wave of the Wave 2 to 149.14, which would have constituted another low risk / high reward long trade opportunity with a target of 150.50 to 150.60 .
__________________________________________________ _________



Update on TS# 197 Buy EUR/JPY at 149.27 <HR style="COLOR: rgb(209,209,225)" SIZE=1>Friday, October 13 at 15:45 ET


Since our TS# 197 Buy EUR/JPY at 149.27 was triggered the price rose to 150.28, 22 pips short of our target. It has since declined gradually in a very narrow channel for over 4 days to a recent low of 149.61

The trade was entered into half way into the fifth upwards wave, making it a midtrend entry. The conservative target for this trade is actually 150.16, which was already met. Ideally, the entry point should have been at the beginning of the fifth wave at 147.68, and the predicted safe, conservative target would have been 150.10, 242 pips higher. In any case, the likelihood of the price rising to the current target at 150.50 is still good.
__________________________________________________ __



EUR/JPY update for Friday October 5 14:00 ET <HR style="COLOR: rgb(209,209,225)" SIZE=1><!-- / icon and title --><!-- message -->EUR/JPY narrowly missed hitting our stop and climbed to 149.91. All is in order to meet our target at 150.50. With all due respect, the pattern of movement between the entry point and target is irrelevant. It is possible for many different patterns to form, but the endpoint is all that is relevant.

__________________________________________________ _____

Thursday October 5 at 2:00 ET
TS# 197 Buy EUR/JPY at 149.27
Stop is 148.93
Target #1 is 150.50
Risk is 37 pips
Reward is 120 pips
Reward : Risk ratio is 3.2 to 1

For research purposes only.
__________________________________________________ _

EUR/JPY update for Wednesday October 4 at 3:00 ET

Wednesday October 4 at 3:00 ET
EUR/JPY, according to our system, can reverse its upwards trend at either 150.50, or, more likely, 151.00 to 151.10. The safest strategy is to set the limit to short EUR/JPY at 151.00 with a stop at 151.57.

The target is far off, below 148.00, so a 60 pip risk is not a problem. If the upwards trend reverses at 150.50 instead of 151.00, then we can still enter the trade during the first upwards corrective wave, at the top of the minor Wave 2.
<!-- / message --><!-- controls -->
HI Itme,

are you sure that the reward for the latest EUR/JPY signal is 120 not 185...from 148.65 to 150.50

Thanks
  • #1,456
  • Oct 17, 2006 6:41am Oct 17, 2006 6:41am
Hi lifetime_trader, the answer to your question about GBP/USD is contained in post # 1452 above. The confidence level of this prediction is quite good, as far as our system is able to predict market moves.

babarmughal, thank you for pointing out the error in the reward for EUR/JPY. The correction makes that a very good reward : risk ratio. However, our confidence in the wave count is not as good as in the case of GBP/USD because we are busy and tired and have not had as much time to study it.
  • #1,457
  • Oct 17, 2006 6:48am Oct 17, 2006 6:48am
Well we hope y'all get a bit of rest... LOL

Scott


Quoting itme
Hi lifetime_trader, the answer to your question about GBP/USD is contained in post # 1452 above. The confidence level of this prediction is quite good, as far as our system is able to predict market moves.

babarmughal, thank you for pointing out the error in the reward for EUR/JPY. The correction makes that a very good reward : risk ratio. However, our confidence in the wave count is not as good as in the case of GBP/USD because we are busy and tired and have not had as much time to study it.
  • #1,458
  • Oct 17, 2006 6:53am Oct 17, 2006 6:53am
Quoting smjones
Well we hope y'all get a bit of rest... LOL

Scott
Hey Scott, what do think about GBP/USD?
  • #1,459
  • Oct 17, 2006 6:59am Oct 17, 2006 6:59am
Well, I suck at predictions. I am much better with postdictions, but I think itme's assessment seems correct. It looks like it is rolling over at least in the short term to the down side. The real key is all the dollar strength and GBP's
fundies improving. Have you read this post?
http://www.forexfactory.com/forexfor...0839post120839

scott


Quoting c1ro
Hey Scott, what do think about GBP/USD?
  • #1,460
  • Oct 17, 2006 7:07am Oct 17, 2006 7:07am
Quoting smjones
Well, I suck at predictions. I am much better with postdictions, but I think itme's assessment seems correct. It looks like it is rolling over at least in the short term to the down side. The real key is all the dollar strength and GBP's
fundies improving. Have you read this post?
http://www.forexfactory.com/forexfor...0839post120839

scott
So, it's kinda reversal now?
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